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Impact of Energy Consumption on Environment: A CS-ARDL Approach for BRICS Countries
Muhammad Muddassir
Abstract:
The urbanization in BRICS is expanding rapidly and to meet the requirements of that increased population. To meet the energy requirements of that increasing population heavy industries and fossil fuels are being used. This study examines the effects of energy use, gross domestic product, renewable energy and urbanization on carbon emissions. To account for the heterogeneity and strong cross-sectional dependence in BRICS nations i.e. Brazil, Russia, India, China, South Africa and mixed order of variables, the most favorable technique known as cross-sectionally augmented autoregressive distributive lag (CS-ARDL) has been used for estimation. The results show that energy use, GDP and urbanization are positively related to carbon emissions, and renewable energy is negatively related. As the panel heterogeneity is concerned, long run relationship of variables across the panels is captured by cross-sectional autoregressive distributed lag (CS-ARDL) and for robustness Augmented Mean Group Estimations (AMG) and pooled mean autoregressive distributed lag (PMG-ARDL) are estimated. As the BRICS countries have extreme heterogeneity which leads to mixed magnitude of coefficients of variables across each country, so AMG estimates this heterogeneity effectively overall. This study relates the magnitude of use of energy intensity to the use of renewable energy for policy formulation on the degradation of environment.
Keywords:
Energy Intensity, BRICS, Urbanization, CS-ARDL, CO2 Emissions
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